Daniel Njuguna Chege & 4 others v Tusker Mattresses [2021] KEELRC 1589 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether O & M Law LLP was properly on record for the Respondent
Not properly on record; no leave obtained with participation of previous advocates Kanchory & Company
The Respondent merely stated it had sought leave and that the prayer was unopposed. The Court held this did not meet the legal requirement for post-judgment representation. O & M had not engaged Kanchory & Company, there was no signed consent, and it was unclear whether Kanchory & Company had been served. Submissions by counsel not properly on record fall with the application.
Whether High Court insolvency orders stay execution in this Court
No - the Insolvency Act and Companies Act do not halt proceedings at the tail end of execution; attached assets remain under the E&LRC's jurisdiction
The attached assets had already been designated for sale under orders of this Court following a separate judicial process. They are not available for redistribution in the insolvency pool. Insolvency of an employer relevant to this Court is governed by Part III of the Employment Act, particularly Section 67, which the Respondent did not invoke or satisfy. The Claimants' right to fair and expeditious administration of justice also weighed against the stay.
Whether the Respondent demonstrated insolvency under the Employment Act
No - the Respondent did not demonstrate insolvency within Section 67 of the Employment Act
Section 67 defines insolvency of an employer company as existing only where a winding up or administration order has been made, a voluntary winding up resolution passed, or a Receiver or Manager appointed. The Respondent relied instead on the Insolvency Act and Companies Act and did not address the Employment Act regime at all, so the threshold was not met.
Effect of the Parties' settlement agreement and dishonoured cheques
The Respondent had agreed a mode of payment and issued cheques that bounced, and this context weighed against releasing attached assets
Judgment had been delivered for the Claimants; execution commenced and assets attached; the Parties agreed on payment of the decretal sum; cheques dated 10th and 12th November 2020 were dishonoured. The Court considered the attachment against the Parties' settlement agreement, holding that attached properties were not available for satisfaction of other orders or decrees in other Courts.
Legal principles established
#- A law firm seeking to come on record post-judgment must obtain leave with the participation of the outgoing advocates; submissions by counsel not properly on record cannot be considered
- Winding-up/insolvency orders do not divest an executing court of attached assets already earmarked for sale under its own orders; attached assets are not available for redistribution among other creditors
- Insolvency of an employer for purposes of employment disputes is governed by Section 67 of the Employment Act, and an employer must demonstrate insolvency under that provision
Court orders
#- 1.The Application by the Respondent dated 23rd November 2020, is declined
- 2.Costs to the Claimants
- Jurisdiction invoked
- Original jurisdiction of the Employment and Labour Relations Court over the employment dispute and resulting execution; insolvency of employers governed by Part III of the Employment Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Daniel Njuguna Chege & 4 others v Tusker Mattresses [2021] KEELRC 1589 (KLR)", Case Analysis (2021). Not stated in judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/keelrc/2021/1589/eng@2021-06-11
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.